In a move to reduce the number of public sector banks, Finance Minister Nirmala Sitharaman recently announced the merger of 27 public sector banks. This will bring down the number of PSU banks to 12. The merger may impact individuals’ savings bank accounts or fixed deposit accounts with these banks. Here’s what you need to know.
Account Number: After the merger, your bank name will change, which will result in change in your savings account number. The banks will certainly inform you about the same.
Cheque Book: You may be asked to use the same cheque book of your existing bank and may be issued a new one after the merger process is complete.
Indian Financial System Code (IFSC): Your bank’s address will change and so will the IFSC. This implies you will have a new online login and bank app.
Debit Card: A new debit card will be issued after the merger is complete. However, you will be allowed to use the existing debit card.
Loans: For borrowers with MCLR-linked loans, the interest rates would not change till the reset date. It is also important to note here that the Reserve Bank of India (RBI) has mandated banks to link their interest rates to external benchmarks such as the repo rate from October 1 this year.
Fixed Deposits: Till the merger is complete, you will continue to earn the interest rates mentioned in your deposit. However, after the merger, the maturity amount will be transferred to your bank account in the merged entity.
KYC: You will be required to update all the details wherever Know Your Customer (KYC) process was done.It can be for various investments, income tax filing, insurance etc. Likewise, you will have to update about your new account after bank merger everywhere, be it your salary account or auto-debit facilities.
Ensure you update your email and registered mobile number with the banks to not miss any important communication from your bank.